Low-volatility stocks may offer stability, but that often comes at the cost of slower growth and the upside potential of more dynamic companies.
Luckily for you, StockStory helps you navigate which companies are truly worth holding. Keeping that in mind, here are three low-volatility stocks to avoid and some better opportunities instead.
AerSale (ASLE)
Rolling One-Year Beta: 0.15
Providing a one-stop shop that integrates multiple services and product offerings, AerSale (NASDAQ: ASLE) delivers full-service support to mid-life commercial aircraft.
Why Are We Out on ASLE?
- Sales tumbled by 8.1% annually over the last two years, showing market trends are working against its favor during this cycle
- Negative free cash flow raises questions about the return timeline for its investments
- Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
AerSale’s stock price of $6.53 implies a valuation ratio of 13.4x forward price-to-earnings. Dive into our free research report to see why there are better opportunities than ASLE.
Brink's (BCO)
Rolling One-Year Beta: 0.69
Known for its iconic armored trucks that have been a fixture in American cities since 1859, Brink's (NYSE: BCO) provides secure transportation and management of cash and valuables for banks, retailers, and other businesses worldwide.
Why Do We Think Twice About BCO?
- Demand is forecasted to shrink as its estimated sales for the next 12 months are flat
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 1.3 percentage points
- Underwhelming 12.5% return on capital reflects management’s difficulties in finding profitable growth opportunities
At $91 per share, Brink's trades at 12.8x forward price-to-earnings. Read our free research report to see why you should think twice about including BCO in your portfolio.
Genpact (G)
Rolling One-Year Beta: 0.92
Originally spun off from General Electric in 2005 to provide business process services, Genpact (NYSE: G) is a global professional services firm that helps businesses transform their operations through digital technology, AI, and data analytics solutions.
Why Are We Hesitant About G?
- 4.4% annual revenue growth over the last two years was slower than its business services peers
- Weak constant currency growth over the past two years indicates challenges in maintaining its market share
- 2.5 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position
Genpact is trading at $47.70 per share, or 13.8x forward price-to-earnings. To fully understand why you should be careful with G, check out our full research report (it’s free).
Stocks We Like More
Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.
While this has caused many investors to adopt a "fearful" wait-and-see approach, we’re leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years.
Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Sterling Infrastructure (+1,096% five-year return). Find your next big winner with StockStory today for free.
